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tv   First Business  FOX  February 25, 2010 4:30am-5:00am EST

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with republicans and departments for a healthy debate on health care reform. >> plus, the president of toyota apologizes for safety issues which sparked a massive recall. will it be enough for lawmakers and victims of run away toyotas? >> the outlook for retailers and consumers keep a tight grip on their wallets. >> it's all ahead on this edition of "first business." >> you're watching "first business," financial news, analysis, and today's investment ideas. >> good morning, everybody. i'm angela miles. buyinget close to a t.v. if youe one for the highly anticipated meeting between president obama and lawmakers. >> the second day of testimony
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will come from fed chair ben bernanke. >> there's more testimony coming out on toyota today, and news from general motors shutting down it's hummer production. >> in our trader talk, we are joined now with richard ilczyszyn. i have to mention that yesterday, it seemed like every time ben bernanke opened his mouth, the markets rallied a little bit more. >> agreed. that's a good point. let's start at the beginning part of the day. the s&p currently at that time was trading at 1090's. we get a housing number that shocks the system, the worst in recent history here for this specific months, the market sells off. then bernanke's testimony, the market gains momentum on statements that we have to keep
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interest rates low, giving the technical buyers help in their trade. the s&p yesterday trading above 1100 gives us a little bit of breath. i don't think this is going to be a tear on a bull run here unless we can close above the previous high, 1112, well above the 50-day moving average. i think the jury is still out whether or not this is going to be enough information to continue the rally, but i like what he said. >> we have a lot to get through, jobless claims today, the health care summit happening today with president obama. there's a lot to watch with the markets right now. >> that's exactly right. now, again, if you look at the charts here in the last week, although we've had a nice bounce off the bottom last week, we are still in a trade be range. anybody calling up right now, we are saying take the money.
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it's all about locking in profits and short gains. the volume's been relatively light on the big board. that's something to keep in mind, as well. >> have a terrific trading day. great to have you on. >> thank you. >> ben bernanke will be back on capitol hill today. here's a clip with his comments yesterday. >> economic conditions including subdued inflation trends are likely to warrant low levels of the federal funds rate for an extended period. >> that's the key, low rates for an extended period. the chairman later said rates will go up if inflation becomes a problem down the road. the federal funds rate has been around zero to a quarter% since september, 2008. low rates plus stimulus money helped the economy expand 4% in the last half of last year.
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business and consumers spending are the hinge. >> americans are guarding their pocketbooks. these concerns may not be putting the squeeze on all retailers. february's plummeting consumers confidence numbers suggest americans are continuing to guard their pocketbooks. morning star industry senior analyst kim picciola doesn't think all will continue to feel the pinch. >> we've seen many posting decent results as consumers are focused on north korea that they're get ago good deal in this environment. we think consumers will continue to focus on price, bowedding well for retailers that have a good deal to offer. >> consumer confidence dropped 10 points to their lowest levels in nearly a you're. son assumers have job security
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weighing on their mind. >> you've got to prepare for a rainey day, and prepare for job loss, although i have my own business, but i notice that my clients, and everything have dropped off. >> i haven't been employed for two years, so i'm definitely watching my dollars. >> kim picciola says that despite the low confidence level, retailers such as target can expect a better year, especially as consumers begin spending on nonessential items. >> they're starting to see improvements in apparel and home related goods which we think bodies well for 2010. >> low costs and high end retailers have been doing all right, but it's a bad time to be caught in the middle. affluent consumers are largely unaffected by the downturn. penny pinchers search for low-cost items.
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middle cost products have few buyers these days. >> the jobs front picks up now that the senate passed a job creation bill, which is much smaller than the plan the house proposed back in december. if passioned, the new measure could spur 250,000 new jobs. it would give tax breaks to businesses that hire unemployed workers, as well as more money to states for infrastructure products like new correction and bridge repair which some senators say are in bad need of a fix. >> we recently had a crumbling bridge that came close to killing people. we saw what happened in minnesota. we have to do something bit here instead of spending our money in social engineering, we need to start building bridgion and roads and repairing them. >> the bill must now go before
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the house of representatives, wimp could vote on it friday. the obama administration strongly supports the latest bill, but wants one that increases small business access to credit. >> on the economic calendar for today, watch for the initial claims number, as well as durable goods, and on the earnings calendar, it's gap reporting in, as well as who ins, kohls, new mining and sun corporation. >> still to come on "first business," the president sits down for a televised debate on health care. >> a law professor talks about the toyota recall and legalacong taken.
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they're standing up speaking out and bucking the system. "we think of the republican party as being on probation." but is anybody listening? "we need to re-establish credibility with the folks out there." "too many people don't believe that we really will be conservative." "i need some new republicans. "so i'm out across the country
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recruiting new republicans." just what options are left for the gop to get it right on the just what options are left for the gop to get it right on the 700 club, thursday at 1 ♪ ♪ ♪ [male announcer] to the men and women of the united states armed forces, the uso delivers the joys and comforts of home. even out here. find out how you can help at
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the uso. until every one comes home. ♪ president of toyota testified before congress wednesday, accepting full responsibility for the recalls of 8.5 million vehicles plagued by brake and accelerator issues. >> in the name of the company, its long standing tradition and pride, we never run away from our problems, or pretend we don't notice them. >> the president of toyota said he's confident there was no design flaw in the system. toyota executives outlined a series of steps to add new safety features to cars,
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including an override system that could have stopped the acceleration problem. >> you have often a brake override feature for some recalled vehicles. why haven't you offered that feature for all toyota vehicles? even under a very vigorous testing conducted internally, no problem or malfunction was identified. >> there's legal activity in this case. joining me now is marshall shapo. terrific to have you on the show today. >> nice to be here. >> there's class action lawsuits forming in this case, people suing who were in accidents or injured, people suing because of stock prices feeling they were misled, people suing because the price of their toyota is being driven down by recalls. what is going on here? >> there is a lot of things
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going on. most of them one way or the other have to do with consumer information, much did people know going in, how much did they know as this situation was developing, how much did toyota know, how much did the national traffic safety administration know. it's going to take time to sort this out. congress is having its innings right now. there will undoubtedly be independent investigations. i think we have to say that right now, this is a developing story with developing data, and we can't begin to see what the end of it is yet. >> toyota already saying that they will lose about $2 billion in repairs. >> yes, and just all the issues that are surrounding this case. it's a big company. they don't want to lose anymore money than they have to. it's going to be a tough fight, isn't it, for people to go up
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against toyota? >> this is one of those things that remains to be seen is how tough it is for both sides. if you're talking about civil actions, the products liability tort suit, there are going to be at least insofar as we can predict now, a lot of complicated issues. what do we mean by a defect? how do you prove a defect? are we talking about floor mats, or the mechanical problems with the accelerate or electronics in the accelerate system, driver error? all these things are going to have to be sorted out in pretty close combat between the lawyers for the company and lawyers for plaintiffs, whether individuals or in class actions. you can almost bet that there's going to be stackion of paper that will come up to here, and
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maybe up to here of data on this problem. >> absolutely. and what do you think is going to happen with these class action lawsuits? sometimes when you go up against big companies, it comes down to a coupon. they have to figure out how to spread the final profits from the settlements. what's likely to happen here? i guess like you i've gotten coupons like that myself. often, i ignore them, because they don't seem to be worth the trouble of trying to cash them in. an answer to that is that we really don't know where these things are going to come out. we also don't know how many of the serious personal injury actions, and the death claimings are going to be folded into class actions, or how many of them are going to be sued on their own. >> great to talk to you today. thanks so much for your expertise in the legal field.
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>> the president gears up for a 6-hour debate on health care. will he get the results he's hoping for? >> to help my patients avoid dental problems
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i recommend act fluoride mouthwash. act works with calcium to rebuild enamel. to avoid dental problems act daily. health care gets underway this morning at 10:00 a.m. president obama sits down with republicans and departments at blare house. it will be a six hour meeting of the minds on health care reform. among the ground rules according to the financial times, the table will be a square hollow shape. republicans nixed the idea of a u-shape, because it could be
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biased. there will be no coffee break, but a buffet lunch. the president lil deliver opening remarks, but not from a podium. his remarks will be followed by statements from one republican, and one democratic before launching into the discussion. at a house hearing wednesday regarding rising insurance premiums, congressmen were ramping up for today's summit. >> i hope the president is truly interested in good ideas regardless from which side of the dias they eminate. >> if we fail to pass reform, health insurance will become to expensive only the healthy and wealthy will be able to afford coverage. >> joining me now is robert kasmer. a poll is out saying americans resoundingly have a very low
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expectation, and don't believe republicans and departments today will be able to come up with something from this meeting. >> this meeting will be a chance for president obama to sell his plan to the public, taking his plan to the public and try to circumvent the congress. the republicans and departments know their positions. the president's proposal was a combination of house and senate bills. nothing new is on the tail. there's some incentives to the republicans to appreciate it better than the senate and house bills. nothing new is on the tail. the president is really going for the public vote and trying to sway the public to his side, which will force congress to an agreement. >> what do you think of the idea of putting it on t.v.? is it a gamble for president? i think the democrats are going to win. the republicans can create
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obstructions, as they have been accused. the case will be made, preventing the republicans from just saying no, forcing them to say we agree on this, we don't agree on this. if the president gets some agreement, that increases the chances of the congress doing something. >> what if the republicans come to the table and play nice with the president, and ready to actually talk about some reform? i know they really just want a fresh start on the whole deal. what do you anticipate there? >> i don't think there will be anything fresh. there will ablot of politics, as you say. the republicans are going to try to avoid the just say no position and present a real alternative to what the president is doing. everybody wants to see the number of uninsured decrease. how we diet, whether more government subsidies or tax credits to employers, both
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parties want to get something done without giving in too much. the republicans have to pray nice. that's what the president is counting on. that's why the t.v. was important to prevent them from just saying now, and having the public see the president's plan as a viable alternative. >> the president tipped his hand early, coming out monday talk about the health care plan over the next 12 years. relationship boehner said you should have waited until we all were together at the table? >> the president might be wanting to set up for a procedural vote where the congress can use a simple majority to pass a somewhat reduced bill through the reconciliation process. the coming elections in november won't see the democrats taking a lot of heat on this issue. >> you think something is going to come out. >> i do, it will be watered down
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from what the president wants, and go through this reconciliation process without a lot of republican support. >> thank you very much. robert kasner, thank you for your thoughts today. >> thank you. >> up next in "chart talk," another look at the s&p 500. they're standing up speaking out and bucking the system. "we think of the republican party as being on probation." but is anybody listening? "we need to re-establish credibility with the folks out there." "too many people don't believe that we really will be conservative." "i need some new republicans. "so i'm out across the country recruiting new republicans." just what options are left for the gop to get it right on the just what options are left for the gop to get it right on the 700 club, thursday at 1 it's tough out here. the days are long. the nights get lonely. but we have a job to do. we have responsibilities.
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we have a commitment to our country to our families our wives and husbands our children our grandchildren and to each other. the uso is a bond that we share to help us stay close here at home and far away. the uso is always there because we need them they need us and we need you. [male announcer] this is how america supports our troops. the uso depends on the generosity of the american people, people just like you. to find out more about how you can help visit our website at uso dot org. the uso until every one comes home.
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be right back. prskalo. >> good morning, angie. >> what direction do you think we're going into with the s&p 500 now that we're above 1100? >> i think right now we're in a treacherous area. all the numbers comes out, yesterday's number, today's, the home sail number, consumer confidence, they're not good numbers. the only thing holding the market up is basically our fed chairman testifying that he's going to leave interest rates alone. it's scary, because if that's what's supporting the market what happens when they raise rates, which eventually they'll have to do. >> exactly. the reason he is not raising rates is because the economy isn't that great. it takes a minute for the market to catch up to that thought. that likely to happen throughout the trading week? >> i would think right now we keep getting these little bits
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of bad news, and his testimony saying he'll leave rates alone says he knows there's bad news out there. this 1100 in the market right now is very significant, but as you see, every time, before we would go up to 11 and trade down near 11, now we're sitting around the 1100 mark. trading down to 10.5 and 1030 again. >> i think the reaction to the stability that the fed chairman brought in saying they will leave rates alone. any downward move, the vix will pop again. >> thank you very much. >> you're welcome. >> that's all the time we have for today's show. from all of us here at "first business," thanks for joining us, and have a great day.
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